The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for CHESAPEAKE ENERGY () for the 20-Oct-2017 expiration period. You can analyze the opportunity in depth over at the .
CHK was recently trading at $4.33 and has an implied volatility of 59.58% for this period. Based on an analysis of the options available for CHK expiring on 20-Oct-2017, there is a 34.13% likelihood that the underlying will close within the analyzed range of $3.34-$4.35 at expiration. In this scenario, the average linear return for the trade would be 58.54%.
52 week low: CHESAPEAKE ENERGY recently reached a new 52-week low at $4.31. CHK had traded in the range $4.32-$8.20 over the past year.
Trade approach: Reaching a new 52-week low is a bearish indicator, so this trade is designed to be profitable if CHK maintains its current direction and does not revert back to pricing on the bullish side of $4.33 on 20-Oct-2017. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bearish strategy, the trade would be profitable if CHESAPEAKE ENERGY closes at or below $4.41 on 20-Oct-2017. Based on our risk-neutral analysis, there is a 52.11% likelihood of this return.
Downside risk: As with any options trade, there is a substantial downside risk where you may lose most or all of your investment.
To analyze this trade in depth, please visit the .
This is an automated post generated based on a market analysis of delayed data at 8/10/2017 1:14:29 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.